MANILA, Philippines — The Supreme Court ordered Lazada to reinstate five of their "illegally dismissed" riders after the High Court ruled that the laborers were actually regular workers — thus entitling them to backwages and benefits.
In a statement released Friday, the SC explained why they ruled in favor of the petitioners maintaining that the employer bears the burden to prove that the person whose service it pays for is an "independent contractor" rather than a regular employee with or without fixed terms.
Related Stories
READ: SC Rules in Favor of Dismissed Lazada Ridershttps://t.co/ndZJEKPhHD pic.twitter.com/YGgHhCZXmE
— Philippine Supreme Court Public Information Office (@SCPh_PIO) January 20, 2023
"The Court ordered Lazada to reinstate the petitioners to their former positions as Lazada riders, with full backwages computed from the time of dismissal up to the time of actual reinstatement," the statement read.
"The case was also ordered remanded to the Labor Arbiter for the computation of the total monetary benefits due the petitioners."
The Supreme Court's Second Division, in a decision penned by Senior Associate Justice Marvic Leonen, granted the petition filed by the following:
- Chrisden Cabrera Ditiangkin
- Hendrix Masamayor Molines
- Harvey Mosquito Juanio
- Joselito Castro Verde
- Brian Anthony Cubacub Nabong
Why a complaint was filed
The five were hired by Lazada in 2016, primarily tasked to pick up items from sellers and deliver them to the company's warehouse with P1,200 each per day as service fee. This was mentioned in a contract entitled, "Independent Contractor Agreement."
In 2017, the five Lazada riders found out that they were removed from their usual routes and would no longer be given any schedules, promoting them to file a complaint against the company before the National Labor Relations Commission (NLRC) for illegal dismissal.
The Labor Arbiter earlier dismissed the complaint on the ground that they were "not regular Lazada employees." This was upheld by the NLRC and the Court of Appeals. However, the highest court of the land would rule otherwise.
Progressive groups in Congress like the Makabayan bloc, Kilusang Mayo Uno and Bukluran ng Manggagawang Pilipino have long clamored outrightly ban contractualization of labor, but President Ferdinand Marcos Jr. continues to assert that "some jobs are seasonal."
All elements in regular employment present
"In ruling in favor of the petitioners, the Supreme Court found that Lazada failed to discharge its burden of proving that the former were independent contractors rather than regular employees."
A two-tiered test was applied by the Supreme Court to determine where an employer-employee relationship existed between Lazada and the petitioners: a four-fold test and the economic-dependence test.
The Court found that all of the following factors were proven:
- employer’s selection and engagement of the employee
- payment of wages
- power to dismiss
- power to control the employee’s conduct
"First, petitioners were directly employed by Lazada as evidenced by the Contracts they signed," continued the statement.
"Finally, Lazada had control over the means and methods of the performance of the work of the petitioners, as reflected in the way they carried out their work. Lazada required the accomplishment of a route sheet which kept track of the arrival, departure, and unloading time of the items."
The riders risked a penalty of P500 if an item was lost, on top of its actual value. The services performed by the petitioners were also proven integral to Lazada's business, with the delivery of items "clearly integrated" in the services offered by the company.
The Court also found that the five were economically dependent on Lazada for their continued employement due to being directly hired, this after being previously engaged by a third-party contractor.
"[P]rotection of the law afforded to labor precedes over the nomenclature and stipulations of the Contract," said the 24-page decision with regards to the provision of the contract that expressly states the lack of employer-employee relationship.
"Thus, it is patently erroneous for the labor tribunals to reject an employer-employee relationship simply because the Contract stipulates that this relationship does not exist."